Passenger duty 'still stifling economy'

Published Friday, 30 November 2012
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Passenger duty on short haul flights is a "major stumbling block" to rebalancing the economy in Northern Ireland, the NI Affairs Committee has said in a new report.

Passenger duty 'still stifling economy'
The report says the tax on passengers remains a stumbling block to the economy. (© UTV)

In a report published on Friday, the body of MPs called for the government to reduce or preferably scrap the tax.

Short haul flights make up 98.5% of all flights to Northern Ireland, on which a £13 levy is currently imposed per passenger.

Currently a rate of £65 is imposed on direct flights to North America. However the devolution of power to set air passenger duty for direct long-haul flights from Northern Ireland was finalised this month and takes effect from January.

The report stresses that there is "no realistic alternatives to air travel" in the region, particularly for business travel.

It said that air connectivity, the air links to hub airports, particularly Heathrow, must be at least maintained at the current level, with the slots for flights to and from Northern Ireland at Heathrow "ring-fenced" and further routes actively sought.

It recommended for improvements to be made to road and rail links to all three of NI's airports.

A shared visit visa for the UK and Republic of Ireland was also suggested "in the interests of competitivity".

For the people of Northern Ireland air travel is not a luxury, it is fundamental to family and economic life.

Laurence Robertson, NI Affairs Committee Chair

The Committee said the business community in Northern Ireland is concerned that a report into options to maintain the UK's status as an international hub for aviation will not be completed until 2015.

It added that the government should expedite the review and come to a decision as soon as possible given its importance to Northern Ireland.

Laurence Robertson MP, Chair of the Committee, said: "To help rebalance the Northern Ireland economy, it is vital that air links to Great Britain, mainland Europe and the rest of the world are robust.

"That means making sure key routes and landing slots are protected, and that people who have no real alternatives to flying, for business or their family life, are not unfairly penalised by the taxes imposed on air travel."

NI Independent Retail Trade Association Chief Executive said addressing air passenger duty would have great benefits for the economy.

He said: "It will increase the number of visitors and ultimately the amount of spending in the local economy, so it's important that we get our passenger duty right, it's important we expand the number of our routes in Northern Ireland and I think it's about developing both our airports to their maximum potential."

© UTV News
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6 Comments
R in Béal Feirste wrote (724 days ago):
This tax should without doubt be scrapped. The fact is in Ireland we have two tax domains- North/South. Given the small size of the North, it is very easy to fly through Dublin Airport, thus avoiding the taxes imposed on travelling in the North. The amount of people travelling through Dublin Airport will only rise with the ever increasing disparity between air tax in the North & South. Think about it- where can you really fly to (forgetting sun destinations such as the Costas, Greek Islands etc) in Europe from Belfast? Will we ever see flights to Brussels, Madrid or Berlin? Maybe if we cut this tax and tried to encourage inward investment from the bigger European airlines then we could increase the amount of passengers using the three airports in Belfast and Derry. If we don't, then expect to see major losses in Belfast airports and gains to our sister airport in Dublin.
Realist in England wrote (724 days ago):
Norman - cutting fuel duty could possibly help in terms of giving people more money to spend elsewhere (not an unfair suggestion as it would ultimately end up being taxed anyway). I doubt it however. As for corporation tax, cutting that would wreck your economy. Think - you wouldn't be cutting it for new companies arriving; you'd be cutting it for all companies. Those companies would get to send more profits home to America/Japan/Europe/etc. In exchange for sending money somewhere else abroad other than 11 Downing Street, what do you get? You get a reduced block grant from those paymasters you love so much over the water. That would equate to less public money to spend in the six counties. Why on earth would you support such a move? Lowering corporation tax is a good idea in theory but you MUST equilibrate various economic factors across Ireland first before you could expect any realistic chance of enticing new investment that could create new jobs and ultimately give you a chance of breaking even on the venture. If you fail to integrate your policies with those guiding the rest of the Irish economy, you may as well campaign for Stormont to use a substantial portion of its funding to build a new palace for the Sultan of Brunei. Trust me, the big multinational corporations really don't need the cash you seem desperate to give them for some reason. You need to be free to set taxes, benefit rates, etc. more generally. The power to shoot yourselves in the foot over corporation tax in isolation is not something about which to get excited. Westminster is not your friend and will not allow you to prosper at the cost of middle England. In my personal opinion, uniting Ireland politically is the best way to ensure you get a massive increase in foreign investment.
WTF in Ards wrote (724 days ago):
Who cares.......what about flags and parades?
norman.d in bangor wrote (724 days ago):
this country is taxed that much its stiffling our economy firms are moving to china and other low taxed countries we have to many mlas at stormont and advisors to be paid for money that could help cut this tax we will never get out of recession untill we cut fuel duty corporation tax and this airline tax we just cannot compete
Danny in Ulster wrote (724 days ago):
APD should be scrapped altogether, it's just another govt stealth tax that is no doubt squandered by the crooked MP's in Westminster.
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